Wiliot at Deloitte's Digital Agenda 2020
Wiliot was delighted to participate on The Future of Demand Chain as part of Deloitte's Digital Agenda 2020, alongside some other amazing presenters. Digital Agenda 2020 covered the most trending business topics within Change & Transformation, The Human Experience, Digital Entrepreneurism & Business Growth, and Emerging Technologies. Catch Wiliot's own Steve Statler give a keynote about the postage stamp-sized computer on a mission to connect everything.
Christina Viola 00:00
Welcome to this year, Deloitte Digital Agenda 2020. And this is a streaming edition this year. My name is Christina Viola, and I am your host through this series of inspirational entertaining and very exciting keynote talks, we have the best people for you today, on Digital Agenda. You can find a link and follow this program, you can also find the code I can tell you it is da 2020. And if you want to watch later, you can also do that while leaving the content up, at least for a while. So do it fast. Make sure you watch all these talks, I can tease a little bit about who you can get to hear in these talks. It could be for example, Duncan Waro, former VP of innovation of the and creativity at the Walt Disney Company, it's Tom Goodwin awarded number one voice in marketing on LinkedIn and author of digital Darwinism, then it is Samuel West founder of the Museum of failure, and Linda Lucas programmer, and storyteller. And the title of this session that we're coming into now is connect everything. How a postage stamp sized computer is accelerating the shift from supply chain, chain to demand chain. So get ready for a piece of the future. Imagine a postage stamp size, battery, fruit free blue tooth tags powered by harvesting energy from radio waves. I think it sounds like something out of a science fiction movie. But it's a product coming out of Wiliot, a semiconductor company connecting people and products. And the man to tell you about this is the author of Beacon technologies, the presenter of Mr. Beacon, it's a podcast and a senior VP at Wiliot, where he's responsible for applications engineering, product management, marketing and business development. It is my pleasure to introduce to you, Steve Statler. The stage is yours.
Steve Statler 01:57
Wonderful, well, first of all, it's a real privilege to be on stage here at the Deloitte Digital Agenda session. It's obviously very unusual circumstances. But we see Deloitte as being a very special company with respect to what we're doing, which is very disruptive, we believe it's going to change the way business is done. And when you do something like that, it's really important to have help for companies that are trying to absorb this technology, who can help with the strategy, who can help with the process, who can help with the technology. So before I go into a lot of the information about what Wiliot out is doing, and what the impact is on the economy, and the companies that adopt this technology, I'd like to have some fun with you, and indulge in a thought experiment.
So imagine someone has just given you a superpower. And that superpower is to have the ability to see radio waves, so maybe not the superpower that you're hoping for. But bear with me for just a minute. So you're looking around, and you're looking around, maybe sitting at home or in your office at your monitor. As you gaze around the environment that you're in, what do you see. So these radio waves are colorful, so you probably see a rainbow of color, there's a rainbow of color streaming in through the windows as the FM radio, the digital television, the cellular radio comes in, you look at the Wi Fi access point, there's a halo of color that is coming from that. And then you look around your own body, maybe the watch that you have has got radio energy streaming from it. And then of course, your phone has multiple radios. So that's exploding with color. So we're surrounded by this sea of energy, that's just waiting for somebody to tap into it. And that's exactly what Wiliot is doing. We are capturing we're harvesting, we're recycling the energy that surrounds us. And then we're using it to power a computing device that can securely connect that can sense that can compute, and then can communicate with the Bluetooth infrastructure that surrounds that. And in doing that we are taking the cost of connectivity from hundreds of dollars to 10s of cents.
Our mission is to enable people to connect with products for less than 20 cents. And if we can do that, then we can really go from an Internet of Things which is really an Internet of expensive things, to an Internet of everything and a mission to connect everything that's important to us. When we do that, it changes everything. It really changes the way business is done. And so in this presentation, what I'd like to do is to explain to you how we're doing, what we're doing, how it works, what it will look like. But then more interestingly, and more importantly, what it means to the businesses that you're running what it means to us as, as consumers, as we change the way things are made, the way they're distributed, the way they're sold, the way they used when we own them, and also the way they're recycled. So this is a big idea.
Wiliot is a cloud computing company. We're a semiconductor company, what we're doing is is challenging, but we have some great support from some wonderful investors. So some great financial investors, but then strategic investors that cover a really broad range of companies on the semiconductor side at Samsung and Qualcomm. On the E commerce side, it's Amazon and Alibaba. We have M ventures, which is the investment arm for Merck, the German pharmaceutical company, we have on the shipping side, Musk, these applications will impact global supply chains. On the telco side. It's Verizon, and NTT Docomo, and then Avery Dennison, who are the largest maker of RFID tags in the world, they're synonymous with with labels. And what we're making will manifest itself as a sticker, a tag as a label. And this is, is what it will look like a postage stamp sized computer that powers itself by harvesting radio waves. And I'm actually holding one of our early products here. And you can see it's about two and a half centimeters wide by two centimeters high, the production versions will actually be smaller than what I'm holding in my hand now. But we're now making production silicone.
And the way this tag works is the antennas on the side are capturing radio frequency energy in the 2.4 gigahertz spectrum. So that's the part of the spectrum which is used for Wi Fi and Bluetooth. So the energy comes in on the wings of that Hornets. That is what our product looks like. And then the antenna at the top is used for broadcasting. And we broadcast a standard Bluetooth Low Energy advertising packet that can be understood by any Bluetooth device, including the one that may be in your hand, your pocket or your purse. So what we're doing is about more than just connectivity, it's it's about having a computer device that has memory, it has three cores, it's an ARM processor, it can be programmed.
And what we're doing with this, one of the things we're doing with it is to sense and there's a broad set of sensing functions that are possible with this product. But our short term focus is on temperature on something called pickup and, and open and close detection. So temperature, I think is fairly obvious. There are many things that we care about where temperature is important there, for cold chain around food around medicine, if we can measure the temperature of products, as they flow through the supply chain, then we have the opportunity to extend the life of those products to avoid consuming products that are bad. And generally speaking, our goal when we work with partners in this space is to extend shelf life. If we can extend the shelf life of food on the shelves of stores, then that can add up to hundreds of millions of dollars of savings, it can save a lot of waste as well, which is very important as we look at climate change. This pick up sense is very interesting. So this is the ability to detect the movement of a product that is tagged with one of these Wiliots, as we call them. And if we can do that we can start to measure engagement. We can measure engagement with products on shelves, we can measure engagements with products when they are at home and we'll be talking about why that's important and what you can do with that. And then lastly, opening and closing is very interesting for tamper detection. It's very interesting to trigger unwrapping experiences. And it's very interesting if we are looking at changing the behavior of interactions with products based on whether the product has just been delivered, or if we've opened the box And we're unwrapping it.
So before we get into some of the applications of the technology, I'd like to pull back the curtain and explain to you a little bit about how this technology works. And at a high level, it's actually very simple. We can harvest energy from all sorts of radio waves. And there's many kinds of radio waves that surround us, we can harvest from 2.4 gigahertz, which is the spectrum that's used for Wi Fi and Bluetooth. That's what this tag is doing that I'm holding. But we can also harvest energy from cellular signals, the cellular signals that your phone is broadcasting. And we're also working on harvesting the FM radio signals, and FM is a really wonderful source of energy. Because it's pervasive, pretty much wherever there are people there, there's FM energy. And so this is what we describe as the energy network that we harvest from. There's a second network, which is the broadcast network. So these tags are constantly harvesting and broadcasting. And when they broadcast, the signals can be read by phones, by Wi Fi access points, but also by smart appliances, the speakers, the smart speaker, so imagine having a conversation with Alexa, who's helping you put together the piece of furniture that was delivered, or advising you on the regimen for, for taking the medicine that you've just received. There's also Bluetooth in other places that you maybe don't think of straightaway, like light fixtures, there's a systemic move away from tungsten lighting to LED lighting. Because it's cheaper, it's more sustainable, those lighting fixtures are actually talking to each other very often over a Bluetooth mesh. So this is a great source of energy. But it's also a source of communication for products that are tagged in this way. So we get the energy from radio waves, and we're broadcasting Bluetooth, and we're talking to appliances. But it doesn't just stop there, the signal goes up into the cloud.
Why does it do that? It goes into the cloud, because that's where we do a lot of the sensing, we describe what we do is sensorless sensing, we don't have bulky sensors. In this, this is very low cost. Our goal with these tags is to sell something like this for less than 20 cents, we're already selling them for a significantly less than $1. And that's just with version one of our product. But one of the reasons why we can keep the price so low is that the sensing is done in the cloud, the sensing of temperature, the sensing of movement. But also, another key thing that's done in the cloud is decryption. Imagine these tags in your clothing in your drinks cabinet in your medicine cabinet, you don't want anyone to be able to spy on you to track you to know what your consumption habits unless you're authorizing them for a good reason. Because they're your doctor or because you want to find your jacket that you might have left in in a taxi cab, then maybe you're happy for other people to be able to read this out. But but it has to be something that you control, something that you opt into. And in order to enable that everything that we broadcast is encrypted, it's encrypted. And it's then re encrypted for every packet that is broadcast. So every packet is different. So if you have some packaging, or some products and clothing that has these tags, and if someone's observing and looking at the transmissions, they won't know if there's one tag 100 tags that will really seem like white noise unless they have your permission to decrypt the output from these tags. And that is one of the things that's done in the cloud.
So from this, hopefully you have a sense of how this works. And it starts to become evident that what we have here is this very interesting hybrid of bluetooth technology on one side, and RFID tagging on another. We're like this weird child, we have a Bluetooth mother and an RFID father, and hopefully we are inheriting the best from both of our, our parents and you know, what are those strengths? And what are those weaknesses that we avoid by having this hybrid of technologies on the Bluetooth side, then it's I think it's fairly obvious we have an infrastructure that surrounds us in the past when People have tried to associate a digital ID with a product using RFID tags have actually been getting down to a very low cost. They're racing down towards a, a single cent for RFID tag. But the challenge with RFID is the cost of the infrastructure. And that's one of the things that has held back the proliferation of that technology. But with Bluetooth, we all have a Bluetooth reader that we have with us. It's not an incremental purchase. Very often the scanners that are used in an industrial setting to scan the QR codes that are becoming ubiquitous, the barcodes that are printed on products, they're actually Android devices that have a Bluetooth radio and already able to read the output from from tags like ours. The other thing that Bluetooth has going for it, which is less obvious, is the fact that the interactions require nothing from the user. So typically, with a QR code, with an NFC tag or an RFID tag, you're relying on someone scanning or tapping. And anytime that you're asking either an employee or a consumer to do something, that's when the challenges appear. What we've seen with Bluetooth is the conversion rate, the ability for someone to read a tag that's Bluetooth, is 50 times better than in an environment where you're asking a consumer to do something. And the reason why you don't have to do anything with Bluetooth tags is because your phone's already listening for those signals, it has to because your phone has to be ready to talk to your car, radio and your watch.
So the radios already turned on. If you turn them off, then the operating system will actually invite you to turn them on again, because they're very efficient. And this ability for a phone to listen to a tag, even if the app is not running, even if the phone's been rebooted is tremendously powerful. And if you can increase the conversion rate by more than an order of magnitude, then the ability to join the digital and the physical increases, because you're not requiring the user to do anything. And this isn't just relevant in consumer applications, it's very relevant in industrial applications, where you want to make sure that everything that's being loaded into a distribution vehicle is scanned, and that can be done without having to have the employee to remember to actually scan it. Alright, so hopefully now you've got a sense of what this technology is.
Let's talk about what this means and what the impact is. And we think the impact is going to be quite profound. We're very used to a ongoing increase in efficiency in our supply chains. But if we can tag everything, and connect everything to the internet, then we believe this is going to accelerate something that's already happening, which is a move from supply chains, to demand chains. And we'll talk about what that is in detail. But the net is that this can save hundreds of millions of dollars for companies and it can drive increases in revenue. And I'm going to use three examples to hopefully convey what that means. We took with demand chain, this move from supply chain to something that is more precise, that's more efficient. We talked about demand signals, and one of the most significant demand signals is avoiding this. This is a shelf with a gap in it. And no retailer likes that. The reason why they don't like it is that it impacts sales, if you don't have the product that the consumer wants, then that that will depress sales. If you have the right product, if you have the product that someone didn't even know that they wanted, but it's there in front of them, then you have the opportunity to drive a lift in sales. And the reason why this battery free Bluetooth technology can help avoid the out of stock situations is that you can tag items in the store in a way that allows you to have a real time view of what's in stock.
So in the old days, they used to shut the store down they do a stock check, and you'd have a snapshot of what was in stock maybe a month ago. Now with RFID technology that's got a lot better. And so maybe your snapshot is just a couple of days old. But if you have an active Bluetooth transmitter that is attached to every product in the store, then you have what we call continuous inventory. Continuous inventory is a real time view of not just what's in the store, but where it is in the store. So if I know what's in stock, where it is in stock, I can help people find the product. So very often, you know that the products in the store, but what is what shelf is it? How can I find someone that that helps me find this thing. And of course, shopping apps are starting to fill that gap. But a shopping app is only as good as the data on what's in stock and where it is. And if we have an active radio that's associated with products, then we can not only have the product there, because we've got a demand signal that is real time, that's telling us that our stock is running low. But we can help people find that. And so we're more likely to drive that lift in sales. And if we know exactly what's in stock, and what isn't in stock, we can actually run a leaner supply chain. So we can have less buffer in our depots, less product in distribution vehicles, while still having everything that the consumer wants in the store. Now, it's very easy to say that, but this is quite a profound change. And this, this one thing can account for hundreds of millions of dollars of capital on the balance sheet of not just a retailer but a brand.
If you think about it, brands have really been in the dark as to the sales of their products, we have clients that have gone from having a view that is maybe two or three weeks old about what was sold in the stores of their retail partners, to having a real time view. So imagine you're not the retailer, but you have a display rack in your retail partners store and you're a brand. If you put tags on the products, you can suddenly see sales as they happen. If you can see sales as they happen of your product in someone else's store, then you can reduce the amount of inventory, you can actually have smaller delivery vehicles that go from running a milk round to distribute your product and milk round is where you go to every store, whether they need you to go there or not to only going to the stores that have the danger of a gap on the shelf where the product needs to be replaced. So smaller vehicles, shorter runs less product in the vehicle, but more product on the shelf, which is where it needs to be. So that is demand signal. Number one. But if we have a computer that's associated with a product, we have a second demand signal, which is understanding the physical interactions with a product. And we call this pickup sensing. And if we have a pickup sensor that's associated with a product on a shelf, we can understand if people are interested in it or not. So imagine these tags are on a fashion item, you've just run a promotion. How effective was was that promotion. If I can measure if someone picked up the sweater that I was just advertising, then I have the kind of information that typically I would see in one of these things, which is a web analytics dashboard.
We have a real possibility of using web analytics, but applied in a retail context to understand the effectiveness of our promotions. And then it becomes very interesting, okay, our promotion got people to pick the product up, then we can start to look at the conversion rate from pickup to purchase. And that tells a lot about the quality of the product. And we may find that a lot of people picked up the red sweater. But only 10% of them bought it. But less people picked up the black sweater. So maybe our promotion of the black sweaters wasn't so good, but 50% of them bought it. That's the kind of information that simply hasn't been available to us outside of the web context. But now it can be. So the last demand signal that I want to talk about is actually going beyond the store into the home. So imagine these tags are on a bottle of cognac. Imagine they're on a bottle of medicine. Imagine they're on a bottle of shampoo. You have the real prospect of actually going from a one off purchase to a subscription.
So the prospect subscribing to Scotch is real, if you can measure someone's interaction with, with the bottle. And if we do that, then you can be assured that you'll never run out of your, your favorite drink, which makes, if I'm a keen consumer of that beverage, then that makes me happy. And it certainly makes the company that is producing the product happy if they can understand the impact of what they're doing in terms of packaging, and promotion and the product itself, they can measure the the impact on your consumption. And we see a future where Nielsen ratings go from rating who's watching a particular TV show to a Nielsen ratings of who's actually consuming products in real time. And that consumption that usage may apply to apparel. So imagine the executives who work for a company that makes a power rushing into the office looking at the dashboard, and they can say, hey, this weekend was a really great weekend, for the the blue turtleneck sweaters that we have, everyone was wearing them. And maybe that was because of a change in temperature or an advertising promotion.
We go beyond Oh yeah, we managed to sell someone a product to Oh, yeah, we sold this product. And actually, people love it. Because they're using it, the difference between purchasing and knowing whether that represents a like, and consumption is quite a profound one. So hopefully, you're starting to get this sense that supply chains can change, because we're getting a demand signal that is transforming from a system that was based on guesses. Because let's face it, a forecast is an educated guess, about what we need to make and produce and push through a supply chain with the demand chain, then we're getting real time signals that tell us what's in the supply chain, where it is, what's on the shelves, what people are engaging with, and then what people are actually using at home. And if we can do that we can significantly reduce the capital employed. And we can start making the products that not just sell that are being used. And this has some very interesting applications from an environmental perspective, which I'll come back to in a second.
There are many, many things that we can do with this technology. One of the drivers of the use of this technology is a phenomenon called serialization. And we're all used to the VIN number, the unique number on our car. With high value pharmaceutical products, we understand that some of these are being given a unique serial number. It's a move from products being described by skews, stop keeping units to every instance of product having a unique, unique identity. And this is happening. Now in the world of apparel, Ralph Lauren announced that they were giving every polo shirt a unique number. Why would they do that? Why would you want to know the difference between one red polo shirt and another red polo shirt? With a lot, there's lots of good reasons for doing that. One of them is anti counterfeit. If there's a digital identity associated with a product, then I can know if it's the real thing. And if it's a premium product that I'm paying for. That's important to me, as a consumer. It's also very interesting to avoid gray markets detection to detect product diversion. And this is something that's a concern for, for brands across many different industries. If you're making a product, for the US market, an item of clothing, that's a fashion product, you can expect a lower price than if it's sold in Tokyo, where, say a Calvin Klein or a Ralph Lauren shirt can really be sold at a premium. And what brands want to avoid is the middleman that buy and sell these are working the system. And so this detection of gray market is as important to them as the detection of fake products.
So that's those are some of the things that we see digital IDs being used in the manufacturing side. On the distribution side, it's about understanding where product is in the supply chain, avoiding theft of those products. If we have a digital ID that's constantly broadcasting and the product falls off the back of a lorry as we say in the in the UK, we have the opportunity To do Lost and Found not just of jackets that get left in bars and taxi cabs, but products that find themselves disappearing, they call it shrinkage from the delivery system, and also from the store. anti theft is a very tricky thing. And the idea of having a minimum wage store associate, tackling a shoplifter as they run out of the door is very challenging from a safety and liability perspective. But if you can track that product, as it finds its way to the thief's home, then you have another way of you have another way of avoiding the shrinkage, which is so much of a burden on brands and retailers. Some of the use cases that I think are most fun to think about when we start connecting everything in the home. So imagine this, you're washing your clothes, you stuffed them in the washing machine, and the washing machine machine tells you that there's a problem, you've got your whites and your reds mixed in the load and the temperatures wrong.
Now this sounds fanciful. But if you think about it, a lot of appliances are already being connected to the internet. Most new fridges and washing machines now have Bluetooth and Wi Fi. So why not use those radios to actually understand what's inside to get the temperature settings right. And to avoid the catastrophe of too many pink shirts. One of the things that also excites us is this last phase of recycling. So if we have a digital ID on products as they enter the waste plants that are previously putting things into landfills, we have the opportunity to identify products, to separate them, and to look at the digital passport that defines the kind of fabric and products that are used in their construction. And from that we can do a much better job of recycling.
But maybe more profoundly, if we're going to design a circular economy, we have this opportunity to give a second life to products, we can start to and understand the provenance. Who, who was wearing this product? How often was it worn? And if we can understand that, then there's the opportunity for us to clean out wardrobes to have a message go to someone and say, Hey, do you realize that half of your wardrobe has clothing that you haven't worn for two years, there's an opportunity to clear it out. Maybe you donate it, maybe you resell it, maybe we start to broker apparel in a way that gives it a second life.
So I'm going to wrap up now with one last thought, which is the fact that what we're doing, we can't do alone. So we've started a program called works with Wiliot. And we already have some amazing partners in it, that make the tags that take our chip and turn it into something that can be washed and put into clothing that can be manufactured to the right shape and specifications to last a month or two last 10 years. But also the infrastructure the the readers from the likes of HP or Uber, or using the Bluetooth radios that are already in their products to read our tags, and the software that's very important to actually keep track of this and integrate these digital IDs with the with the legacy systems that that need to track the way products are being made, distributed, sold, used and recycled.
So thank you very much for your attention. It's been a real pleasure and a privilege to be here. Hopefully what we've been talking about as posed a lot of questions. And I can't think of a better environment to be in than with Deloitte who specialize in answering answering very challenging questions, understanding what they mean to companies from a strategic perspective, and helping to join up the different things that can be connected and making this vision of connecting everything a reality.
Christina Viola 34:30
Thank you very much, Steve. I have a question for you. To deliver great, it's great. And personal services. Of course, you need to have a lot of data, that's paramount. But also we want to protect our privacy. Yeah, we want to make sure that the consumers are also safe with their privacy. Can you talk a little bit about that?
Steve Statler 34:50
Yes, privacy is paramount, because unless we have trust, then the system's not going to work. And for us, it's super important because we all have it Bluetooth reader in our purse or in our pockets. And that's really why we decided to encrypt every tag the output from every tag we made. And we've had offers of orders for literally billions of tags if we didn't encrypt, and we've said now, because we think that that would be a death sentence to this ecosystem. So to enable the trust that is essential, then we have to stick to the letter of the GDPR law.
And so it's really about consumers not opting out, but opting in to have this data used. And we feel like if we focus on applications that really help them. So we didn't even talk about the medical applications of tags that can measure glucose monitoring of being able to find not just lost clothing, but lost passports or even settling, what happened to that odd sock that got went missing. If we can actually add value in in funny ways and meaningful ways, then we think we'll have the right balance between value and, and what's required to manage privacy.
Christina Viola 36:06
Steve, if you can solve the problem of sucks gone missing, that would be solving a very big prevalence of very many people. Thank you so much for your talk today.
Steve Statler 36:16